USD/CAD reverses an early dip to sub-1.25 level

The USD/CAD pair reversed an early dip to sub-1.2500 level and might now be looking to move towards the top end of daily trading range.

Currently trading with a mild negative bias, around the 1.2510-15 region, a goodish pickup in the US Treasury bond yields underpinned the US Dollar demand and has been one of the key factors behind the pair's modest rebound from session lows.

   •  US Dollar firm around 93.30, data, Fedspeak on sight

However, the prevalent bullish sentiment around crude oil prices was seen lending support to the commodity-linked currency - Loonie and seemed capping any sharp up-move, at least for the time being.

Meanwhile, the recent price action clearly suggested selling interest just ahead of the 1.2600 handle. Hence, it would be prudent to wait for a decisive break through the mentioned hurdle before committing to any additional near-term up-move for the major.

Today's economic docket features the release of Canadian Manufacturing Sales figures, along with the US housing market data and would be followed by the US weekly crude oil inventories. 

Ahead of the data, speeches by New York Fed President William Dudley and Dallas Fed President Robert Kaplan might influence the USD price dynamics and provide some short-term trading impetus. 

Technical levels to watch

Immediate resistance is pegged near 1.2530 area and is followed by horizontal hurdle near the 1.2565 level but major upside barrier remains near the 1.2590-1.2600 region. 

On the flip side, 1.2475 level is likely to protect immediate downside, which if broken might now drag the pair below mid-1.2400s towards its next support near the 1.2415 region ahead of the 1.2400 handle.